The chancellor announced on 8th July a temporary holiday on stamp duty for the first £500,000 of all property sales in England and Northern Ireland with immediate effect.
This “holiday” will boost the property market and help buyers struggling due to the coronavirus crisis, as it will result in them potentially saving tens of thousands of pounds.
The Current Position
Currently, in England and Northern Ireland, stamp duty is paid on land or property sold for £125,000 or more.
However, first-time buyers pay no tax up to £300,000 and 5% on any portion between £300,000 and £500,000.
For people who have bought a home before, stamp duty rates are 2% on £125,001-£250,000, 5% on £250,001-£925,000, 10% on £925,001-£1.5m, and 12% on any value above £1.5m.
What has changed?
The government has increased the lower stamp duty land tax threshold to £500,000 for property sales in England and Northern Ireland.
That means any property purchases below the new level will not need to pay stamp duty land tax as long as the deal is completed before 31 March 2021.
People buying second homes and buy-to-let properties will also benefit, but will still have to pay the 3% surcharge due on the entire price.
Chancellor Rishi Sunak said: “The average stamp duty bill will fall by £4,500. And nearly nine out of 10 people buying a main home this year, will pay no stamp duty at all.”
When will the stamp duty holiday happen?
It is effective immediately from Wednesday 8th July and will last until 31 March next year.
Anyone completing a property purchase before that date will have to pay the full normal stamp duty.
It is hoped that this announcement will prompt an increased activity in the otherwise flagging housing market
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Connaught Law and authors accept no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Connaught Law. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Connaught Law.